Press Release 3 T01 Tele Celular Sul En

Transcripts - Press Release 3 T01 Tele Celular Sul En

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TELE CELULAR SUL PARTICIPAÇÕES S.A.
Contact
Ruggero Caterini
Chief Financial Officer and Director of Investor Relations
Joana Dark Fonseca Serafim
Investor Relations
(41) 312-6862
Jserafim@timsul.com.br
Rafael J. Caron Bósio
Investor Relations
(41) 312-6623
rbosio@timsul.com.br
Website
http://www.timsul.com.br/tcf
TELE CELULAR SUL PARTICIPAÇÕES S.A.
ANNOUNCES ITS CONSOLIDATED RESULTS
FOR THE THIRD QUARTER 2001
Curitiba, November 7, 2001 –Tele Celular Sul Participações S.A.
(BOVESPA: TCLS3 e TCLS4; NYSE: TSU), the holding Company of
Telepar Celular S.A., Telesc Celular S.A. and CTMR Celular S.A.,
leading providers of cellular telecommunication services in Southern
Brazil, announces its results for the 3rd quarter 2001.
3rd Quarter 2001 Highlights
Customer Relations
Quality and good customer relations are hallmarks of Tele Celular
Sul. Throughout the quarter, in addition to keeping the focus on
customer loyalty, the Company also intensified its investment in this
distinctive realm.
Tele Celular Sul modernized its Customer Service, widening the
services provided through the Internet, and designed a new
telephone bill layout. A program was created and implemented for
the top consumer market customers, providing special service and a
range of unique offers. New products and services catering for the
corporate market were implemented, in order to meet a broader
range of needs of large corporations and small businesses alike.
Tele Celular Sul meets Anatel goals
In the third quarter, the Company met all nine goals set by Agência
Nacional de Telecomunicações – Anatel (the national telecom
regulatory agency). It must be pointed out that the indicators show a
marked decrease in customer complaints, substantiating the efficacy
of the Company's customer satisfaction policy, as part of the effort to
gain and maintain a good market share.
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The Management
“Tele Celular Sul achieved in the third quarter an EBITDA margin
of 49% over the net services revenue, reflecting a more vigorous
customer retention policy”.
In R$ thousand
3Q01 3Q00 2Q01 Accum. Accum.
until until
Sep/01 Sep/00
Gross Handset Revenue 34,816 9,951 15,098 57,653 71,431
Gross Service Revenue 216,851 208,230 223,454 704,992 620,392
Gross Operating Revenue 251,667 217,821 238,552 762,645 691,823
Total Net Revenue 196,235 171,829 180,091 564,097 539,582
EBITDA 84,435 44,824 80,845 241,649 151,334
EBITDA Margin 43% 26% 45% 43% 28%
EBITDA Margin (without 49% 27% 48% 46% 32%
handset sales)
Net Income 10,878 (3,944) 17,587 43,038 7,122
Net Income per 1,000 0.03 (0.01) 0.05 0.13 0.02
shares – R$
Market Share
Tele Celular Sul's estimated market share for the third quarter 2001
was 68%. The total penetration rate in the concession area was
approximately 15%.
On September 30, 2001, the Company had 1.53 million customers,
of which 59% use prepaid services. Thirty-four thousand customers
were cancelled in the third quarter, to purge the customer base of
default.
Operating Revenue
In R$ thousand
Accum. Accum.
3Q01 3Q00 2Q/01 until until
Sep/01 Sep/00
Net Services Revenue 173,369 163,615 167,333 522,395 477,844
Net Handsets Revenue 22,866 8,214 12,758 41,702 61,738
Total Net Revenue 196,235 171,829 180,091 564,097 539,582
Total Net Revenue for the quarter amounted to R$ 196.2 million,
representing 14% and 9% increments over the 3Q00 and 2Q01.
The Company
started to market
and to distribute Net Revenue from handsets sales was R$ 22.9 million. The 79%
handsets among increase over the 2Q01 is attributed to the fact that the Company is
its accredited taking over the marketing and distribution of handsets to its
dealers.
accredited dealers, activities formerly outsourced.
As to the qualitative aspects, it is worth pointing out that bad debt
levels below those of the preceding years have accompanied the
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revenue throughout the past three quarters. Accumulated bad debt
expenses until the 3Q01 amounted to 3% of the net services
revenue. This figure reached 12% at the end of the 3Q00.
Gross Revenue Breakdown
Total Gross Operating Revenue Total Gross Operating Revenue
3rd Q/2001 - R$ 251.7 million 3 rd Q/2000 - R$ 217.8 million
Handset Sales Handset Sales
Other Interconnection 9.5
1.0 34.8
64.3
Interconnection
74.5
1.0
45.5 95.9 Other 99.4
43.6
Monthly Fee Usage Monthly Fee Usage
Operating Costs and Expenses
In R$ thousand
3Q01 3Q00 2Q01 Accum. until Accum. until
Sep/01 Sep/00
Cost of Services and Sale of Handsets 101,970 106,716 83,150 280,869 315,280
Cost of Services 70,737 83,253 65,942 214,053 228,368
Cost of Handset Sales 31,233 23,463 17,208 66,816 86,912
Selling Expenses 45,268 45,077 39,077 132,016 138,668
General and Administrative Expenses 15,127 12,926 16,788 48,393 36,602
TOTAL 162,365 164,719 139,015 461,278 490,550
6,481 17,047 3,611 15,452 57,278
Bad Debt Expenses
Note: (1) Selling expenses include: a) Bad debt Expenses with; and
b) Effective 2001, the Fistel charge, previously recorded as "cost of services".
(2) In 2001 some "cost of services" items are being reclassified as "G&A expenses".
Operating costs and expenses totaled R$ 162.4 million for the
Increase in
retention
quarter, representing a 17% increase over the 2Q01. The Company
expenses began marketing and distributing handsets to its accredited dealers
in the quarter, thus increasing the revenues from the sale of
handsets and the ensuing costs. There was also an increment in the
expenses related to the customer retention program.
The bad debt expenses for the period were R$ 6.5 million. The
increase in the period is basically related to provisions of ammounts
which are still under negotiation with other telecomunication
companies. The level of collection has been mantained stable. Its
worth pointing out that the bad debt expenses in the period, show a
62% decrease compared to 3Q00.
The subscriber acquisition cost (SAC) for the 3Q01 was R$ 181.00
SAC (R$ 127.00 in the 3Q00) and R$ 185.00 accumulated in the nine
of R$181.00 months of 2001, mirroring the increase in selling costs, and
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especially the impact of the real devaluation to the US dollar on
handset prices.
Depreciation and amortization expenses for the quarter were R$ 51.4
million (including the amortization of the goodwill), over R$ 47.5
million and R$ 43.5 million in the 2Q01 and 3Q00, respectively.
EBITDA
EBITDA amounted to R$ 84.4 million in the quarter, representing
EBITDA of
R$ 241.6 million 88% and 4% increases over the 3Q00 and 2Q01. EBITDA Margin
until September was 43% and the reduction over the 2Q01 is mostly attributed to the
2001 increment in selling expenses.
Net Income 100 44.9%
43.0%
50%
38.0% 41.0%
80 30.3% 40%
EBITDA Margin 84.4 84,4
31.5% 80.8
of 49% over net 60 76.8 30%
26.1% 67.4
service revenue 52.1
40 61.1 20%
in the quarter
45.4
20 10%
0 0%
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01
EBITDA EBITDA Margin (%)
Net Income
3Q01 3Q00 2Q01 Accum. Accum.
until until
Sep/01 Sep/00
Net Income (Loss) -R$ 10,878 (3,944) 17,587 43,038 7,122
thousand
Net Income (Loss) per 1,000 0.03 (0.01) 0.05 0.13 0.02
shares – R$
Net Income The Company achieved an R$10.8 million net income in the quarter,
of R$ 10.8 over the R$ 3.9 million loss and the R$ 17.6 million profit in the 3rd
million in
3Q01
Quarter 2000 and 2nd Quarter 2001, respectively. The decrease over
the preceding quarter is related to the increase in selling expenses
and depreciation.
Investment and Financing
The Company, through its subsidiaries, invested R$ 35.0 million
(R$102.0 million accumulated in the nine months of 2001) in the
expansion of the cellular telecommunications network in the quarter.
At the end of the quarter the Company's total debt amounted to R$
344.6 million, resulting in a net indebtedness of R$ 224.2 million.
From the total debt, the amount of R$ 58.9 million represents loans
and financing in dollars, fully covered by hedge operations, as
protection against the strongly oscillating exchange rate. Additionally,
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a specific part of the BNDES (Banco Nacional de Desenvolvimento
Econômico e Social) loan, corresponding to R$ 20.4 million, is
subject to an interest rate linked to the “BNDES basket of
currencies”, including de U.S. dollar There is no hedge facility for this
specific case.
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“This release contains forecasts and/or forward-looking statements. Those expectations are based on a number of
assumptions. Those expectations are subject to the risks and uncertainties inherent to projections and/ forward-
looking statements. The results may differ materially from the expectations expressed in the forecasts and/or
forward-looking statements if one or more of those assumptions and expectations prove to be imprecise or
unrealized.”
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